CONTRACTS Statue of Frauds (Themis)

UCC Exceptions

1. Specially manufactured goods 2. Part payment 3. Receipt and acceptance 4. Judicial admission 5. Failure to respond to merchant memo (contract enforceable against receiving party who hasn't signed memo)

Real Property Contracts

A promise to transfer or receive any interest in real property is within the Statute of Frauds. The Statute does not apply to the conveyance itself (which is governed by a separate statute), but it does apply to a contract providing for the subsequent conveyance of an interest in real property.

Surety exceptions: Indemnity K

An indemnity contract (i.e., a promise to reimburse for monetary loss) does not fall within the Statute of Frauds as a suretyship provision.

Marriage Provision

Any agreement in consideration of marriage is within the Statute of Frauds, except the promises by each to marry the other (i.e., the marriage contract itself). A prenuptial agreement is the paradigm of an agreement made in consideration of marriage that is subject to the Statute of Frauds. A promise made in consideration of marriage does not become enforceable merely because the marriage has taken place in reliance on it. However, additional part performance or action in reliance may make such a promise enforceable. Restatement (Second) of Contracts § 124

One-Year Provision

Contracts that cannot be performed within one year because of the constraints of the terms of the agreement must be in writing. The year starts the day after the contract is made. Strictly construed... If K can be performed within one year (guard Luke Skywalker for the rest of his life; he dies within the year), SOF does not apply

Quantity term

Enforcement is limited to the quantity term actually stated in the memorandum. A mistake in the memorandum or the omission of other terms does not destroy the memorandum's validity. An omitted term can be proved by parol evidence.

Failure to respond to a memorandum (when both parties are merchants)

If both parties are merchants and a memorandum sufficient against one party is sent to the other party, who has reason to know its contents, and the receiving party does not object in writing within 10 days, then the contract is enforceable against the receiving party even though he has not signed it.

Surety exceptions: Main-purpose exception

If the main purpose of the surety in agreeing to pay the debt of the principal is the surety's own economic advantage, rather than the principal's benefit, then the contract does not fall within the Statute of Frauds, and an oral promise by the surety is enforceable.

Judicial admission

If the party to be charged admits in pleadings, testimony, or otherwise in court that a contract was made, then the contract is enforceable only to the extent of the quantity admitted.

Generally

Ks that fall within the SOF are unenforceable unless evidenced by a writing. Writing must be 1. signed by the party to be charged 2. contain essential elements of the deal Written memo does not have to be written at the time the promise was made; also does not need to be addressed to the promisee to be enforceable by the promisee.

MSOUR

Marriage - A contract made upon consideration of marriage; Suretyship - A contract to answer for the debt or duty of another; One year - A contract that cannot be performed within one year from its making; UCC - Under the UCC, a contract for the sale of goods for a price of $500 or more; and Real property contract - A contract for the sale of an interest in real property.

Specially manufactured goods

No writing is required if (i) the goods are to be specially manufactured for the buyer, (ii) the goods are not suitable for sale to others, and (iii) the seller has made "either a substantial beginning of their manufacture or commitments for their procurement." UCC § 2-201.

Part performance of Real Property K

Subsequent acts by either party that show the existence of the contract may make it enforceable, even without a memorandum. Such acts include: i) Payment of all or part of the purchase price; ii) Possession by the purchaser; or iii) Substantial improvement of the property by the purchaser. Most jurisdictions require at least two of the above three acts to establish sufficient part performance.

Suretyship Provision

Suretyship is a three-party contract, wherein one party (the surety) promises a second party (the obligee) that the surety will be responsible for any debt of a third party (the principal) resulting from the principal's failure to pay as agreed. A suretyship induces the second party to extend credit to the third party. A promise to answer for the debt of another must generally be in writing to be enforceable.

Receipt and acceptance

The contract is outside the UCC Statute of Frauds to the extent that goods are received and accepted or for which payment is made and accepted. UCC § 2-201(3)

UCC - Type of writing required

To satisfy the Statute of Frauds, the above terms must be in writing, but that writing need not be an actual contract. It does not even need to be contained on one piece of paper—a series of correspondence between the parties may suffice.

UCC Modifications

Under UCC § 2-209(3), the requirements of the Statute of Frauds must be satisfied if the contract as modified is within its provisions. Any of the above exceptions would apply, though, to take a modification out of the Statute of Frauds. (If after a modification a K is, e.g., for $10 (less than $500), SOF is not required). However, UCC would also enforce a provision in a contract for the sale of goods that required a modification to be in writing, if such a provision exists.

Part payment

When part of the purchase price for a single item has been paid, the contract is enforced and the partial payment falls outside the UCC Statute of Frauds only to the extent of the purchase.

Sale of Goods for $500 or More

When the price of goods is at least $500, the UCC requires a memorandum of the sale that must: i) Indicate that a contract has been made; ii) Identify the parties; iii) Contain a quantity term; and iv) Be signed by the party to be charged The memorandum needs to be signed only by the party disputing the existence of the contract; it is not necessary for the enforcing party to have signed the writing.